Getting Started With a Win/Loss Analysis

This is the first part of a three-part series that explores how to plan and implement one of the key tools of modern marketing success – the win/loss analysis.

This article will detail the basics – what, why, and how of a win/loss analysis – while part 2 will cover how to get the right data for it and how to conduct the necessary interviews, and in part 3, we’ll focus on how to share the results of the analysis, summarize and implement its findings. Let’s get started.

What is a win/loss analysis?

A win/loss analysis, by definition, is the process of investigating and understanding the factors that determine why a deal was won or lost – and subsequently influencing them to win more new business opportunities. Done right, it is one of the most critical tasks a product marketer can perform when it comes to acquiring and retaining customers, thus growing business efficiently and effectively.

Why is it necessary to perform a win/loss analysis?

Understanding why a prospect became a customer, ended up choosing a competitive alternative, or dropped off helps strengthen the sales process for future bids. Unfortunately, while it’s natural for any salesperson to wonder why they lost a prospect, it is a well-known fact that said prospects are upfront about the reasons for their choice only 40% of the time. This means that 60% of the time, businesses have no “full picture” understanding of why a particular deal went south – and are simply winging it in subsequent sales opportunities.

Win/loss analyses are conducted primarily to achieve any of the following business objectives:

  • Win more new accounts and reduce customer churn by providing sales reps with insights into why customers are – or are not – willing to buy into your offerings
  • Standardize successful approaches, and recommend improvements based on past learnings rather than relying on winning or losing by chance
  • Determine brand perception and validate the messaging and positioning for your offering in the market, and its aspects that appeal to potential clients over competitor products
  • Yield higher return on the effort and time invested in the sales process by optimizing each subsequent sales effort

How can you ensure an effective win/loss analysis?

Your approach to win/loss analysis, and the framework adopted to implement it effectively, are doubtlessly critical to ensuring success. Will your analysis adapt or evolve on occasion? Without doubt. But any way you slice it, the essential approach to deploying it should cover the following steps.

Step 1: Secure Stakeholder Buy-in for the Main Objective(s) of the Win-loss Program

It’s important to remember that not every insight that comes out of your win/loss analysis will be earth-shattering – which is why it’s also imperative that you get buy-in to your win/loss program from key internal stakeholders. Specifically, it is important to agree on:

  • The main objective(s) of the win-loss program (for example, enhancing sales, improving customer satisfaction, reducing customer friction, or even all of the above)
  • What the program will and will not cover’
  • How the success of the program will be measured

Tip: It makes sense to have different people responsible for different outcomes of your win/loss program, or you’ll end up fighting an uphill battle right from the start. Besides conducting internal surveys to help you flesh out your hypotheses, you can also run mini-win/loss analysis sessions with internal stakeholders to get them onboard with the style of questions you’ll be using, how you’ll ask them, and what to look for when analyzing the findings.

 Step 2: Select the Right Data Channels and Sources

Gathering, analyzing, and acting on win/loss feedback is critical to determine why your customers decided to take or leave your offer. Simply put, you need to know your current position before you think about making improvements. You can do this by finding out, at a bare minimum:

  • The total number of opportunities (including ones still in progress)
  • Number of opportunities won
  • Number of opportunities lost

Once you have that, calculating your win rate is straightforward – it is your number of wins divided by your total number of opportunities.

Win rate = # of wins/ # of total opportunities

Your CRM should also include a field that requires your sales reps to enter a reason for every sales win or loss. You will then be able to analyze these reasons as part of your win/loss research. With such rich data at your disposal, you can draw reports from just about any perspective – for example, by number, percentage, reason, or value of your losses. The same process can be done for wins, too, so that the circumstances that encouraged sales can be replicated for more sales.

Similarly, other internal and external data sources should be identified and leveraged to arrive at relevant, insightful explanations for every win/loss. These include qualitative sources such as sales and buyer feedback, which provide invaluable insights into the buyer psyche. 

In part 2, we will cover in further detail: 

  • How to select the right data sources
  • How to determine the right sample size
  • How to conduct effective interviews
  • How to identify the right questions

Step 3: Focus on Getting Started, Not Getting Perfect

Know that the insights you hope to uncover through win/loss programs take time to incorporate into a customized interview – however, desist from waiting to get it all right at the start. If you wait until everything is perfect before the interview process begins, you risk losing the momentum and thrill of the initial sign-up. 

Starting early and quickly allows you to get a head start on receiving crucial insight while adapting subsequent interviews to fix any initial slips.

Step 4: Integrate, Analyze, and Action Results

Once the data starts flowing in, it’s time to work on extracting meaningful insights. To simplify things, implement a system to record positive and negative drivers influencing each win or loss. Aggregate and analyze these drivers across opportunities to identify common trends and patterns and monitor how the data changes over time.

Share all findings transparently with stakeholders across the enterprise to inform intelligent operations.

Step 5: Measure Success

Monitoring the success of a win/loss program can be the most rewarding part – especially when you monitor decision drivers and influence them over time to evolve from weaknesses into strengths. Track your win rate and check if it improves over time. To get even more valuable insights, apply additional context while analyzing data – for example, time, geography, customer segmentation, or competitor wins.

Analyze the weight of each decision driver, and plan accordingly to flip it in your favor over time.

Using win/loss analysis to get ahead

In an increasingly aggressive and unpredictable market, it is critical to understand both – why you win and why you lose sales opportunities. Every opportunity counts. With the understanding afforded by win/loss analyses comes the ability to make consistently intelligent sales decisions.

As a result, you’re better positioned to steer your business in the right direction, whether that entails doubling down on a particular segment, investing in competitive intelligence, or switching to a different language when communicating with customers. With the power of data on your side, you’re so much more likely to take the right call.

Read Part 2: Getting the Right Data

Read Part 3: The Results

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